Small Business Majority’s Testimony on the Affordable Care Act’s Importance

John Arensmeyer

John Arensmeyer

As we’ve seen in recent weeks, some members of Congress are pulling out all the stops in their attempt to repeal the new healthcare law. Opponents of reform are using the same line of attack that they’ve used in the past, claiming it hurts small businesses and economic growth. We know the facts aren’t on their side, and that small businesses have much to lose if the law is repealed. That’s why lawmakers who understand the law’s importance have asked us to weigh in, time and again, to showcase the small business perspective on this critical issue.

Members of the House Ways and Means Committee recently asked us to submit written testimony for the committee’s Jan. 26 “Hearing on the Health Care Law’s Impact on Jobs, Employers and the Economy” to give the small business argument in favor of the Patient Protection and Affordable Care Act. We discussed at length its impact on America’s 28 million small businesses and the economy as a whole, and in doing so, put much of the speculation regarding the law’s supposed negative effects to rest.

Our testimony and supporting research reminded the committee that reforming our broken healthcare system has been and still is one of small business owners’ top concerns, and that the majority of small employers believe reform is needed to fix the U.S. economy. It also showed that small businesses support key provisions in the law, specifically ones that help them better afford insurance and contain costs. We conveyed our strong belief, based on our research, that absent reform, these costs would continue to escalate, undermining small businesses’ success and our economic recovery.

Healthcare costs are killing small businesses and sapping our economic vitality, and our surveys of small business owners in 17 states found an average of 67% said reforming the healthcare system was urgently needed to fix the U.S. economy. The good news is that the Affordable Care Act is already helping small businesses afford insurance and provide their employees with coverage. Our national survey of small business owners, released Jan. 4, 2011, found that one-third of employers who don’t offer insurance said they would be more likely to do so because of the tax credit and insurance exchange provisions in the law.

Despite the progress the ACA is already making, small businesses’ top priority is still controlling the skyrocketing cost of health insurance. Repeal would mean an end to the tough enforcement measures in the law, which are saving billions in Medicare waste, fraud and abuse. This would result in higher taxes for employers and employees to fund Medicare, and higher taxes mean fewer jobs. The price of repeal for small businesses and the economy would be substantial in real numbers. Our research shows that without reform, small businesses would pay nearly $2.4 trillion over the next 10 years in healthcare costs for their workers; 178,000 small business jobs, $834 billion in small business wages, and $52.1 billion in profits would be lost due to these costs; and nearly 1.6 million small business workers would continue to suffer from “job lock.”

We left no argument go without a response, noting that repeal would strip small businesses of $4 billion a year in healthcare tax credits and many small business protections, including a ban on denying coverage for preexisting conditions. Repeal would also rob small businesses of their ability to pool their buying power through state insurance exchanges, and the various cost controls the ACA puts in place would also be lost.

These are just some of the disastrous consequences repeal of the Affordable Care Act would have on small businesses—consequences that are too severe on the establishments that create 70% of new jobs in our country. While some in Congress persist in looking for ways to undermine the new law, we’ll continue using scientific research, not partisan rhetoric, to show the law’s real impact on the economy and our small businesses.

Read our full testimony.

Read the executive summary of our testimony.

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